Who Pays the HOA Deductible?  –Condo Insurance in Utah.

Have you driven through a new housing development and noticed the increased amount of townhomes and condos? Townhomes and condos have become a great alternative to traditional single-family home living. Have you ever asked the question, “How would I insure a condo or townhome?” Honestly, I don’t blame you. Insuring townhomes and condos has become complicated, and that’s where we come in. 

Let’s start with a few terms. A condo policy in insurance terms is an HO6 policy. Why HO6? In the insurance world, we started with HO1, today, most homeowners policies are HO3 or HO5, and when condos came along, HO6 was the next term available. A condo/HO6 policy will also cover a townhome in an HOA – Homeowners Association (another term) requiring its owners to carry a condo/HO6 policy. The COI – Certificate of Insurance, is something that you can request from the HOA; about 2/3 of the way town on the right-hand side you will find the HOA deductible. Now that we have a few terms out of the way, let’s talk about condo/HO6/townhome coverage. For the rest of the article, we will refer to them as condo policies. 

Let’s start with the biggest question: are you responsible for the $10,000 – $1000,00 HOA deductible?  

You are! Let’s take the example of our most common claim, a water pipe breaks and damages your walls, flooring, and some of your things. The association deductible can range from $10,000 – $100,000! Your condo policy will cover the damage to your home and personal property and will have either a $1000.00 or $2500.00 deductible. Instead of paying the HOA deductible of $10,000 – $100,000, you only pay $1000.00 – $2500.00.  

What about your furniture, clothing, and personal items? 

A condo policy will pay for your “things” up to the limit on the policy. For example, if you leave something cooking on the stove while you run an errand and come back to a home full of smoke. The condo policy would pay to replace or clean the smoke-damaged property in your home.  

Where are you going to live while they repair your home? 

Let’s assume you are a better cook than your neighbor, and they start their unit on fire, damaging your adjoining condo or townhome. Your policy will pay for you to live in another home while yours is rebuilt.  

What are some examples of a liability claim on a condo policy? 

Even the best cooks can have a bad day. If you were the one who caused the fire and it damaged your neighbor’s home, you would be responsible for their damage. Their insurance company or the HOA insurance company will pay for their damage, and shortly after the claim is finalized, you will receive a letter from their insurance company’s subrogation department.  What is Insurance Subrogation? | Anderson Insurance Group They will demand and pursue you and/or your insurance policy for reimbursement. We always recommend $300,000 in liability coverage for condo owners.  

Loss Assessments

Loss assessments is a crucial coverage that should be included in every condo policy with at least a $10,000 limit. A condo association may assess you for damages to be spread amongst the association’s owners. For the assessment to be covered under your policy, it must be a covered loss listed in the policy, such as fire, wind, liability, etc. Some companies cover the damage to your dwelling under loss assessments coverage. If your company covers the structure under loss assessments, make sure your limit is sufficient to cover the association deductible. 

What is the cost of an average condo policy? 

The average cost of a Utah condo policy is about $20.00 per month or about $240.00 per year. The cost will vary based on the coverage limits mentioned above and other factors including the location, age of the condo and your insurance score/credit.

These are the five primary coverages or benefits of a Utah condo policy. For more details or a proposal, contact a knowledgeable Anderson Insurance Group agent today.   

Utah condo insurance laws changed in 2011 and are different than other states. Click here for more information: Is HO6 the same as condo insurance? | Anderson Insurance Group

Condo insurance in Utah with Anderson Insurance Group.  

We offer condo insurance in Salt Lake, West Jordan, Lehi, Eagle Mountain, Saratoga Springs, Bluffdale, Riverton and all areas of Utah.

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